Healthcare is a big-ticket item on the nation’s annual budget. In its most recent report on national health expenditure trends, the Canadian Institute of Health Information (CIHI) reveals that total expenditures on healthcare were expected to reach $228.1 billion, or $6,299 per Canadian, in 2016. This represents 11.1 percent of Canada’s GDP. Due to Canada’s modest economic growth and our fiscal policy of austerity, health spending per capita has decreased in real terms by an average of 0.1 percent per year since its peak in 2010. Still, the Organization for Economic Cooperation and Development (OECD) shows a continuous rise in share of GDP on health expenditures. The cost of national healthcare is not only hefty — it is expanding.
As healthcare costs increase and compete with other demands on a shrinking budget for common goods, some observers are worried about the sustainability of the system. “Medical inflation,” they fear, will exceed the system’s capacity. To explain, they point to the “demographic time bomb,” a euphemism for Canada’s growing senior population.
This claim cannot be entirely dismissed. The latest census showed that for the first time in the nation’s history, there are more people over the age of 65 than under the age of 18. From 2011 to 2016, the number of people 65 and older grew by over 20 percent, compared to a growth of just 5 percent in Canada’s population overall. Those over the age of 65 already represent 16 percent of Canada’s total population. This acceleration is the result of the baby boomers, who began retiring in 2011 and will be well into old age by 2030.
Seniors consume the lion’s share of all public spending on healthcare. CIHI data shows that the cost for Canadians younger than age 1 was an estimated $10,800 per person, on average. For children aged 1 to 14, per-person average spending on health was $1,423, and for those aged 15 to 64 it was $2,663. The average for those 65 and older was $11,635. Predictably, the older the patient, the higher the average cost. CIHI reported that in 2014, per-person spending for seniors increased with age: $6,424 for those aged 65 to 69, $8,379 for ages 70 to 74, $11,488 for ages 75 to 79, and $21,150 for those 80 and older. Provinces and territories spend almost 46 percent of all public-sector healthcare dollars on seniors.
Are seniors an unsustainable burden on the shrinking welfare state? Are they to blame for mounting costs? Is ageism justified by what appear to be unambiguous figures? Or is it unjustified because the picture is more complex?
Like other mass demographic categories, seniors are not a monolithic group. Costs vary not only with age, but by region and locale, and by gender, socioeconomic status, and Indigeneity. Perhaps the most important factor is low income. Affecting the availability of social supports, quality of housing and nutrition, and access to medical services and assistive devices, low income is also a risk factor for hospitalization due to falls, to take one example. Falls are a leading cause of hospitalization among seniors, and lead to longer hospital stays (twentyone days, on average) than the average stay of twelve days, and cost an average of about $14,800. But it depends on a patient’s income. Using figures from 2012, CIHI found that if income inequality were absent, there would be 3.2% fewer older men hospitalized for falls — about 1,000 individuals.
Is the problem, then, that we have too many elderly patients, or that we have too many elderly patients with low incomes? Where else may we look for answers?
As it turns out, an exclusive focus on healthcare costs for seniors obscures other, more accurate reasons for spiraling healthcare costs.
First, improvements in community health, nutrition, disease prevention, and health promotion push up standards of living for everyone and create the conditions that enable people to live longer. Investments in public health and public services, like clean water and sanitation, are stronger assurances of a healthy population than any vaccination program. That we have a growing number of seniors who benefit from these conditions signals the advantages in maintaining these standards.
Second, there is a trend toward smaller families. On average, the fertility rate is 1.58 births per Canadian woman, a number that has been contracting every year. With fewer children and youth, the elderly population is growing larger in proportion to other segments of the population. The bulge in the age pyramid is steadily creeping upward as baby boomers age.
Third, while acute infectious diseases can be eliminated or effectively controlled, it is not so with the chronic conditions that affect the elderly. As people live longer, they tend to die of lingering illnesses, such as heart disease, stroke, dementia, cancer, diabetes, and arthritis. Diseases of ageing demand allocation of a large proportion of hospital beds, drugs, and long-term support.
Fourth, seniors are not the only patients who use more complex and costly services; all patients do. The growth of the medical industry in healthcare services has created what some call the technological imperative. Technology — whether drugs, screening and imaging techniques, surgical instruments, stem-cell transplantation, or new biotechnologies — is regarded as an inevitable, yet costly advancement in treating illness.
Fifth, accumulated effects of reductions in federal contributions have affected rising costs for all patients. Sociologists Pat and Hugh Armstrong note that federal contributions have dipped from 50 percent in the 1960s, to about 38 percent in the 1970s, to about 15 percent or less in the 1990s. Now at about 25 percent, the long, slow erosion of federal funding has meant the fraying of oversight and the deterioration of services. Senior care is particularly vulnerable.
Finally, there are the costs associated with forms of privatization that have taken hold in the healthcare system. Private clinics, user fees, public-private partnerships involving hospitals, and the general shifting of costs of medical services and home care to individual patients all reflect the erosion of the national standards enshrined in the Canada Health Act. Years of comparative research confirm the cost savings of the public system without sacrifice to quality. As we continue to slide down the slippery slope of privatization, patients are forced to bear the costs themselves.
There are many reasons for rising healthcare costs. Ageing is one, but it is only one. Indeed, spending on seniors has not increased much as a proportion of total healthcare spending. In its report on expenditure trends for 2016, CIHI claims that population ageing is a “modest driver” of increasing healthcare costs. Only about 1 percent per year is attributable to population ageing. When other reasons for a funding crisis are overlooked, it is unfair to hold seniors responsible for the problem.
In a May 2017 editorial in the National Post, CARP (formerly the Canadian Association for Retired Persons) vice-president Wanda Morris writes that we can’t hold seniors responsible for rising public (and household) spending. Public pension income is allocated, and they continue to participate in the economy through taxation and spending. In the area of healthcare, CARP has successfully advocated for improvements to seniors’ income programs, extended caregiver benefits, and funding for homecare services, among other priorities. But these advocacy efforts are at strange variance with the revenue-generating and wholly privatized program, called CARP Health, for the organization’s members, who may spend up to $175 per month to obtain limited assistance in managing their medical needs. Evidently, the Canadian seniors’ lobby group has itself jumped on the privatization bandwagon!
It is easy to blame seniors for the mounting financial burden of healthcare. Statistics and spreadsheets are stacked against them, and having left the labour market, they are not organized. These conditions allow ageism to operate with impunity. But examining the context in which seniors incur a high proportion of healthcare costs reveals many factors for which they are not responsible. Reinvestment in public healthcare would enable everyone not only to avoid the worst impacts of senescence, but also to enjoy physical, mental, and social well-being as they age with dignity.
Cynthia Levine-Rasky is an associate professor of Sociology at Queen’s University and author of Whiteness Fractured (2013) and Writing the Roma (2016).
This article appeared in the Fall 2018 issue of Canadian Dimension (An Unjust Justice System).